State changes oversight agency to jump-start Athenex projects

The state on Wednesday picked a different agency to manage stalled pharmaceutical projects in Buffalo and Dunkirk.

The move is intended to jump-start two major economic-development initiatives: a pharmaceutical company’s headquarters and drug testing laboratory on the Buffalo Niagara Medical Campus and a cancer drug manufacturing plant for the company in Dunkirk.

The projects have languished since the state agreed 15 months ago to spend $225 million on the projects. As part of the deal, Athenex promised to create 1,400 jobs over five years – 700 of its own workers and 700 indirect jobs with suppliers and other companies.

The Buffalo News on Wednesday published a story about funding and work delays at the two sites and quote a company official who said the company was looking elsewhere for expansion in case the local projects don’t come through.

Empire State Development late in the afternoon Wednesday released a statement saying it was taking over management of the projects from SUNY Polytechnic Institute.

“The state remains strongly committed to ensuring both Athenex projects come to fruition in Western New York,” Pamm Lent, an agency spokeswoman, said in the statement. “Empire State Development will now take on the state’s lead role in overseeing the projects and we are optimistic that they will successfully move forward in an efficient and timely manner.”

Howard Zemsky of Buffalo, the agency’s president and CEO, is a close adviser to Gov. Andrew M. Cuomo.

An Athenex official said he is optimistic the shift in management will revive the Buffalo and Dunkirk projects.

“We welcome the opportunity to work with Empire State Development and Howard directly on this project,” said Flint Besecker, Athenex’s chief operating officer.

On Wednesday afternoon, Zemsky called Besecker to reveal the oversight change, Besecker said.

Besecker said he didn’t ask Zemsky when the funding would be added to the agenda of an Empire State Development board meeting, but he expects to have those discussions after Labor Day.

“I see this as a positive development,” Besecker said.

A SUNY Poly spokesmen did not respond to an email late Wednesday seeking comment.

The institute has been the lead agency on the projects since the state began talking to the biotech company two years ago about a public-private partnership.

The state and Athenex in May 2015 finalized the deal, which called for the state to spend $25 million for the company’s North American headquarters and a drug testing laboratory on the Buffalo Niagara Medical Campus and $200 million for a cancer drug manufacturing plant in Dunkirk.

In October, Athenex moved into its headquarters in the Conventus medical office and research building on the Medical Campus. It had 45 employees by the end of last year. But progress stalled after that, even though the governor announced the project to much fanfare in February.

As The News reported Wednesday, construction of the drug testing lab and formulation center in Conventus hasn’t started. It was supposed to have been finished in April.

The company expected site preparations and detailed engineering work to begin in the spring for the Dunkirk plant. But that hasn’t happened.

In fact, Athenex said that it had to advance money to SUNY Poly to buy the land for the plant.

Besecker told The News that Athenex has stopped hiring and making other investments in the region, where it has 92 of its 375 employees worldwide. It also put on hold a planned expansion at its QuaDPharma production site in Newstead.

SUNY Poly presumably would continue to have a landlord relationship with Athenex. The institute owns the land in Dunkirk through its Fort Schuyler Management Corporation arm. Fort Schuyler leases the Athenex space in Conventus from the building owner, Ciminelli Real Estate, and subleases it to Athenex.

email: swatson@buffnews.com

Stephen T. Watson – Stephen T. Watson reports on development, real estate and business in the towns of Amherst and Clarence, along with development, government and school districts throughout the Northtowns. A native of the Town of Tonawanda, he worked at the Post-Standard newspaper in Syracuse before starting at The Buffalo News in 2001.